Kaspi.kz: The Kazakh Super-App - [Business Breakdowns, EP.203]

Summary

• Kaspi.kz CEO Mikhail Lomtadze describes a business with broad national reach: in a country of 20 million people, the app has over 14 million monthly active users, 67% of whom visit it daily — “probably the second most engaged app in the world after WeChat.” The company is targeting net income “in excess of $2 billion” this year at ~25% growth, listed on Nasdaq in January 2024 with a ~$20B market cap, and Lomtadze argues “we still deserve a bigger valuation” — the handicap being that most investors have not really used the product.
• The operating system of the company is Net Promoter Score taken “to another extreme”: ~500,000 consumers surveyed monthly, follow-up calls with consumers seeking improvements taken back to product teams, and any product with negative NPS drastically changed or killed. The proof point: over a decade ago Kaspi killed its credit card — roughly a third of the business, with a “couple hundred million dollar contribution into our net income” — because negative NPS made it “bad money.” Product teams carry no financial KPIs; product quality is the most important KPI.
• The super-app bet was contrarian when made — “most of the companies around the world actually were strong believers in the single-purpose mobile applications” — and Lomtadze frames single login, single brand as probably the most important business-model decision the company made. Skeptics said “we’re crazy because people are not going to do savings account and kitchen accessories through the same brand”; the answer was “our mission is to make users’ life easier, not our life easier.”
• The economics are unusually disciplined for e-commerce: Kaspi’s e-grocery business reached a 6-7% net-income margin within 12 months of launch while still growing ~100% year-over-year and building dark stores, by targeting ~$30 weekly baskets rather than quick commerce. Payments run as a closed loop and were priced at the cheapest rates on the market compared with intermediated networks such as Visa and Mastercard; BNPL underwriting decisions clear in one second 99.9% of the time at a cost of risk under 2% — “world-class” by fintech standards.
• Growth runway rests on going “vertical after vertical” through services and retail industries forecast to grow 14% annually for five years, plus the recently announced agreement to acquire 65% of Turkey’s Hepsiburada from its founders — taking Kaspi’s market reach toward “100 million people.” Marketplace revenue is guided to grow 65% this year; grocery is already 5% of marketplace GMV and the fastest-growing piece.
• Lomtadze’s theory of why super apps or multi-service apps struggle elsewhere is the episode’s sharpest investor takeaway: small markets force quality because churn is fatal — “if 1 million consumers are not happy with our service, that’s it, we’re dead” — while big markets let companies mask product quality with high growth and marketing until growth stops. Losing a consumer is “10 times more expensive to bring him back,” so Kaspi’s constraint became its moat.
• The Nasdaq move validated a previously theoretical thesis: liquidity increased “almost 20 times” versus the London Stock Exchange, and Kaspi was the only company listed on both, making the comparison “factual, not just theoretical.” A major part of investor education, he says, is telling the story of Kazakhstan itself — a country where cashless payments went from 10-15% of transactions around 2016 to 90% today, with Kaspi driving the shift.

Deep dive

1. From distressed bank to a $20B company many North American investors have not used

• Zack Fuss’s setup frames the scale: ~$80B in payment volumes, a $10B-GMV marketplace, $20B in financing originations, 13.4M monthly actives, all “profitably with a bottom line growing at a 20% clip” — in a country of 20 million with a $260B GDP, bordering both China and Russia.
• Lomtadze’s path: built a consulting and IT company in Georgia as a student, HBS in 2000, then Baring Vostok private equity — “the closest industry you can get to actually running your business.” The fund’s Kazakh bank investment, a top-10/15 traditional bank, hit the 2007 crisis, when roughly a third of the banking sector across the region went bust because it depended heavily on wholesale funding that dried up; he stepped in with a partner, supported by Baring Vostok’s managing partner and founder Vyacheslav Kim, who is a Kaspi.kz co-founder, and began building Kaspi.kz.
• His stated disadvantage as a public company: “most of our investors have not really been using our products” — unlike Apple or Amazon shareholders — “but we’re working hard to explain our business model.”

2. Kazakhstan’s cashless leap — and government services in the app

• The macro transformation Kaspi rode and drove: around 2016, cashless penetration was “maybe around 10-15%… and now it’s totally opposite — 90% of all the transactions are cashless and people rarely carry cash.”
• Lomtadze highlights the government-services vertical: driver’s licenses issued in-app (“you take your photo directly from the mobile app… you usually hate your first photo… so you take it as many times as you want”), marriage applications, birth certificates, tax filing, business registration, car ownership transfer — “I can basically sell you a car in Kazakhstan over having coffee with you in the evening.”
• Notably hedged: there is no exclusivity on these services — other apps can launch them — “it’s just the way that our design user experience works so convenient that most of the people use government services through our mobile application.” Kazakhstan, he says, “doesn’t get enough credit for what has been done.”

3. The mission has no industry in it, and NPS is the kill switch

• The mission — “improve people’s lives by developing world-class mobile services” — deliberately names no industry or specific service. The super-app decision defied the single-purpose-app consensus of the time, and inexperience was reframed as edge: “every business we entered we had no experience, and so that was our competitive advantage… we didn’t have a weight of experience on our shoulders.”
• The NPS machinery is the culture: ~500,000 consumers surveyed monthly, follow-up calls with consumers seeking improvements taken back to product teams, which ship “product releases” of simple features drawn from “actual calls of the consumers, their own simple words.” Some e-commerce services score an NPS of 90; financial products run 50-60 — notable because “consumers don’t like banks.”
• The load-bearing example: negative NPS has occurred exactly once — the credit card, ~a third of the business and a couple hundred million dollars of net-income contribution, killed as “bad money” because “we didn’t improve the life of our consumers and this product didn’t have a chance to turn net-promoter-positive.”

4. Vertical mechanics: closed-loop payments, retail’s ally, grocery cracked in 12 months

• Payments stack: commission-free instant P2P (“very similar to Cash App or Venmo”), a QR network where “we are the closed loop — we control the entire value experience from the merchant to the consumer,” priced at the cheapest rates on the market compared with intermediated Visa and Mastercard networks, plus B2B invoice settlement built for convenience stores taking Coca-Cola deliveries.
• The marketplace origin story, as told: Lomtadze spent “three or four days navigating between the stores” trying to buy a computer and printer — sent to a second store’s opening for a discount, offered a display model, then a third store — which birthed a product-structured marketplace with multiple seller offers per item, now offering access to more than 8M SKUs. The positioning against Amazon: “we’re not competing with the retailers, we are actually helping them” — offline retailers get logistics, advertising, working capital, and payments.
• Grocery, a $16-17B fragmented market, was made net-income positive within 12 months at a 6-7% margin while growing 2x and still building dark stores — achieved by curating ~10,000 data-selected SKUs, versus 20-25,000 in a hypermarket, around ~$30 weekly baskets, with free delivery and most orders within 3 hours: “the larger is the size of the ticket, the better are the economics.”

5. The fintech flywheel and the road to 100 million people

• The marketplace-fintech combination is “incredibly powerful”: BNPL “increases the wallet size of your consumers,” merchant working capital lets sellers stock and sell more, “therefore your GMV is growing” — a pattern he notes Apple has experimented with, Mercado Libre runs through its own platform, and Klarna developed from BNPL into broader fintech financing. Discipline shows in the numbers: 99.9% of BNPL decisions in one second, cost of risk under 2%.
• Growth framing: 14M users are “the foundation of our growth… it’s not a limitation.” Services and retail industries are both forecast to grow ~14% annually for five years; “we will grow higher than that,” vertical by vertical. Marketplace revenue is guided to grow 65% this year.
• International: the agreement to purchase 65% of Hepsiburada from its founders takes Kaspi into Turkey’s 85M-person market — chosen because it is founder-led, single-brand, EBITDA-positive (“not burning the money, which is very unusual”) and culturally aligned on service quality.

6. Extreme simplification, the Nasdaq payoff, and why super apps struggle elsewhere

• The build philosophy: launch with one feature, not four, then add one per quarter — fewer people, leaner support, easier consumer education, and better profitability. With ~50 product teams each shipping at least a feature a quarter, “the speed of innovation is mind-blowing.” Travel was launched during COVID “when everybody was pulling out” — airline tickets, then trains, then vacation packages — and became the largest travel agency in two years.
• On the LSE-to-Nasdaq move: “the thesis before was more theoretical… now it can be factual” — liquidity rose almost 20x, and as the only company listed on both exchanges, the comparison was clean. Investor education continues: “if you combine together PayPal, Amazon, Mercado Libre, Klarna, Square, Block… in a single mobile application.”
• The closing theory, worth the whole episode: Lomtadze says multi-service apps have not succeeded or been profitable elsewhere when they lacked a foundational product that consumers loved. Bigger markets let companies mask product quality with high growth and marketing until acquisition stalls, and “if you lose a consumer it’s 10 times more expensive to bring him back.” In a 20M-person market, “it was a life and death question… we had no other choice but to produce world-class products” — the culture he says he would like to help build with Hepsiburada.